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Dealers fail to exploit opportunties with used car customers

Dealers are failing to exploit the most basic opportunities to retain used car customers, according to new research.

Despite the sales opportunity, the survey of 2,000 motorists* revealed dealers were failing to stay in contact with customers – crucial in winning repeat business.

Drivers were asked whether dealers had kept in contact with them after buying their car: 44% had not heard from their dealer, 73% of used car buyers had not been asked if they were satisfied with their car and 85% had not been approached by the dealer to see if they might consider replacing their car or buy another one.

The findings are part of the 2009 BCA Used Car Market Report.

Report editor Professor Peter Cooke, the KPMG professor of automotive management at Buckingham University, said: "Dealers, asking a customer if they know of a family member or friend, who might be prepared to discuss the possibility of buying a car, is almost unheard of.

“The majority of used car dealers appear to wait for their customers to get in touch with them when they have a problem or are ready to buy another car – having to spend considerable time and money searching for entirely new prospects rather than building much closer, profitable relationships with more of their existing customers.”

He said this was a common trait over the last five years the research has been conducted.

“The used car market is worth £4 billion more than the new market so it blatantly shows that dealers should be focussing their effort into used sales,” Cooke said.

Worryingly, while a franchised dealer is the preferred choice of sourcing a used car, drivers are increasingly going elsewhere.

For the second year running, there is a drop in the number of car owners planning to buy their next car from a franchised dealer, from 49% to 47%. Buying from a family member or a friend or through private sale is becoming more attractive.

Cooke said: "A reduced market means more competition and dealers really have to lift their acts and fight for every sale. All too often I hear of friends that walk into a showroom wanting and ready to buy and they’re turned away or not kept in contact with.

“Dealers should be offering test drives to used customers as it’s one of the first things that they can offer to help the customer make a decision.”

According to research from the latest BCA used car market report for 2009 test drives were the most influential factor for choosing a used car after personal experience and influence from friends and family.

The report also says used car retailers should be targeting the younger motorist in order to maximise sales.

Drivers aged between 17 and 24 are the most likely to buy a used car, with 30% saying they ‘certainly will’ or are ‘quite likely’ to in the coming year.

Younger drivers are the most susceptible to the impact of the recession with 60% of 17-24 and 48% if 25-34-year-olds saying they ‘couldn’t afford to buy a new car’. This contrasts with just 23% of 65-years and older drivers in the same position.

The BCA survey also found a higher percentage of younger motorists than ever had opted to buy a used car.

Their preferred choice for the next car is petrol model, with better fuel consumption and cheaper road tax.

“This move to save money is underlined by a wish list of lower CO2, lower maintenance costs and a smaller car, rounded off by a determination to drive a harder bargain on their part exchange,” said Cooke.

For all age groups, 79% of motorists plan to buy used next time they change their car.

*BCA commissioned BMRB International to carry out face-to-face interviews with 2,000 UK motorists in March.

  • Sewells has a best practice guide available on effective selling of used cars. It looks at gross profit margins, stock control, vehicle preparation and display and call centres. For more information call Berta Collins on 01733 468270.

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